I want to talk about a little pain point that we have within our organization, and it's a business valuation calculator. People look at real estate and tools such as Zillow or go through the Kelly blue book on cars and think"Why don't we have a calculator for business valuations?
You've been doing this for a long time, and the reality is we'd like to. But it's not easy. So there are some excellent baselines, for example earnings and revenue, and we can discuss guidelines and how they will look like but what makes us difficult to achieve is that you can take two businesses with the same revenue, same earnings, and they are worth hugely different amounts. In reality, two, three X one another, and not even far apart. And that's because of the intangibles.
There's a myriad of aspects to an enterprise including intellectual propertyand defensibility software, and so on that really make it an extremely complex issue than just, Hey, what's your income and how much are you worth? this hypothetically. We're currently working on this issue. It's probably too early to talk about it, but we're working with an incredible business to resolve this issue, and will find a solution in the near future. However, in the meantime should you have any queries about how you can increase the value of your business or what your business is worth, then why don't you contact us by calling Freedom Factory. We're looking forward to talking with you in the near future.
How do I prepare my business to sell
Many entrepreneurs aren't sure of how to prepare their businesses to sell. You've decided that you'd like to sell your business. Now what? Well, the first thing you'll need to take care of is get your home ready for your business for selling. Therefore, you should obtain two or three years of tax or tax-related documents.
Financials and then put them together. Find them from your accountant and have ready for. If you've not put together an operations manual, this would be the perfect opportunity to create one. You're aware of how your business operates, and you understand how different departments work, but when you sell your business, you want for it to be as effortless as possible for the transition to the new owner.
The value of that will to be taken into consideration in the price of sale. So , get your operations manual and new job descriptions and make sure your home is in order. And the third piece is find, you know, the right team. Find a good broker and an appraiser. Find out what your business is worth. Create a story and then figure out how we going to take the business to market?
When do we plan to introduce it to the market? It's all about the current tax climate. How do I change my financials? What do I say by that is simple. They're going to, we're going to look at the information from your EBIDTA or your accountant can do the same thing, and we're going to translate it into seller's discretionary cash flow, which is.
A fancy way of describing all the money company earns during the process of filing tax returns. It's all about minimization you think? Tax evasion is a crime. Tax avoidance is very smart. You're seeking to be as tax-efficient and pay as little tax as possible. Well, we have to translate that you know, from the non-cash costs you incur, depreciation, you know certain discretionary expenses and then add it back to increase the value.
Highlight the value your business creates to bring about a significant change. And finally, you know, what industry are you likely to be in? How do we maximize your multiple? And there are ways to accomplish this. But think about what industry you're in. Find out, for instance all your financials.
Put an operations manual together to ensure that the transition is as smooth as is possible. The whole process, and everything it is going to be, will be easier in forming the best team together. Find the right appraisers, locate the right brokers to help you prepare your business for sale, and if you need any help with this get in touch with us here by calling Freedom Factory.
Is it the right moment to sell my company?
This is an extremely important issue and when is the best time to sell your company? This one is a bit more art than science. It's basically an assessment of your knowledge. We're outside. This is the backyard of my mountain house , and it's a bit of my happy place.
The first thing I'll recommend to you is a change of scenery. Get out of the office. Take a break from the commute, either with your loved ones or on vacation. You must now find a area where you can go, no matter if you like to fish or ski or go to the mountains , or visit the beach or whatever it is, just go somewhere and switch your place of residence and find a place where you feel really comfortable.
And then think of your company. When I think about it, and I consider it in three ways. First, am I really here and am I clear? Am I really into my business? Do I serve my business or does my business serve me? In my opinion, it's too short to live where you are serving your business. Your business is your personal way to greater freedom and money.
What I mean by freedom is fairly easy - doing what you want, at the time you want, as often as you'd like, with whom you want. And if you're enjoying what you're doing and you think, God, this is amazingand I'm there and I'm in the right place and doing exactly what I'm supposed and that's how I look at selling businesses to other entrepreneurs This is awesome.
And it's not time to sell your company. If you're not certain about this, I'd think a little bit harder and then I'd look at the situation and ask: is my business positioned with the proper vision? Do I have a clear vision on where
I'm going to take my business on in the next one, two, three, maybe up to five? What should I do to get over the issue and feel good, and feel like I've succeeded in what I've done? If your company is growing at 40% per one year or even 50% a year, then you've probably got an enlightened view. It's likely that you're doing a great job and you probably feel at ease. On the other hand, if you've been growing by 5% in the last five years, then that's a little bit more difficult, and perhaps someone else is able to do it better than you.
Whenever my business is expanding at 5%, I'm looking to sell. I'm thinking, okay. I need an operator. My style is more of a strategic person. How do we concentrate on really making something extraordinary, that is focused and purposeful, but your growth rate will be a big indicator of this.
The last thing to remember is, you have done what you came to accomplish if, if you went into your business. When I first came to the business brokerage business, i was aware that I wanted to alter the way that entrepreneurs purchase and sell businesses. I've founded three of the largest brokerages. I've hired at least one I've purchased them to gain the staff, and have transformed it into a more efficient market. That's exactly the goal I set out to accomplish when I arrived to this place.
But if you left your current company and thought about it for a moment and then decide to leave, would you feel happy or would you feel as if you didn't complete the task you were there to complete. So I looked back at it and I say I'm okay I'm satisfied with how my business is serving me. Are I focused and clear every day?
Do I have any remaining tasks to do and do I have a fresh set of ideas to really implement that vision? These are the questions that walk you through it. It's an imprecise science, however overall it's really an assessment of your gut. Which are your thoughts? Are you convinced that it's time to sell your business?
Since, if I ever think about selling it in six months, it's too in the past. So if you have any additional questions about this or something else that you need help with, it's our pleasure to assist you us here in the Freedom Factory. We're waiting for you to give us a ring.
Click here https://freedomfactory.com/market-valuation/ will give you a free business valuation to find out the worth of your business. Denver business broker Ty Tysdal will help you to prepare your business for sale.
Call Freedom Factory for a free business valuation
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